A Chance to Dump Gold on the Upturn

A Wells Fargo strategist argues that a recent reprieve in gold's price is a good selling opportunity.

After moving higher for over a decade, gold and precious metals suffered severe losses in 2013. Stronger growth in the U.S. and a shift in the Fed's intentions toward reducing bond purchases led to a rise in interest rates, dampened inflation expectations, and boosted the value of the U.S. dollar.

These factors became increasingly strong headwinds as 2013 progressed and have caused a negative change in trend. While it may be tempting to increase exposure following the sharp decline, in our opinion, the path of least...